WHY AN ERP IMPLEMENTATION SHOULD BE APPROACHED WITH CAUTION
A long time ago, in a factory far, far away, a humble paper-based scheduling system heralded the dawn of Enterprise Resource Planning….
And just over a century later, the use of ERP systems has exploded.
Historically viewed as the domain of the big boys, ERP systems are becoming more popular with organizations of all sizes. Even in 2012, Aberdeen Group found that 84% of mid-sized organizations (100-1000 employees) surveyed had already undertaken an ERP system implementation.
FIRST OF ALL, WHAT IS AN ERP SYSTEM?
ERP (Enterprise Resource Planning) refers to the systems and software used by a company to manage its day-to-day functions and activities – things like accounting, procurement, manufacturing, supply chain and pretty much anything else you can think of that keeps your business up and running. In fact, present day ERP systems are now so advanced they can take over practically any process you want them to. Except perhaps making the coffee!
But despite all the benefits of implementing ERP systems, they’re not always the saviors that organizations hope that they will be.
ERP SYSTEM IMPLEMENTATIONS: 3 REASONS FOR CAUTION
1. BE CAREFUL OF COSTS MOUNTING UP
It’s not just the cost of purchasing an ERP system, it’s everything else that goes along with it. Not least the costs of implementation – from project management to testing, you’ll need to set aside a good chunk of budget to get your ERP implementation across the line successfully.
And remember, the costs don’t stop once ERP implementation is complete. You’ll have to consider support arrangements that are adequate for your business – do you need 24/7 support, or would a little downtime overnight be an acceptable risk? You would also have to consider employee training costs and the ongoing expense of ensuring software and underlying infrastructure are up-to-date going forward.
2. ERP IMPLEMENTATIONS & UPGRADES ARE NOTORIOUSLY DIFFICULT
We’ve already mentioned the cost of ERP upgrades, but achieving the expected benefits of implementing ERP is often difficult too. In 2015, Panorama Consulting issued a report looking at 500 diverse ERP users. They found that of these projects, 58% went over budget and 65% took longer than expected. And worse than that, only 47% of respondents achieved the benefits they were expecting to from their ERP implementation.
What’s causing this? Is it a lack of understanding about the costs involved? Or is it poor planning of the project? Whatever the cause, there’s no getting away from it, introducing ERP without integrating it with an accompanying sales analytics software is a risky business. So, what’s the answer to how to implement ERP while avoiding the classic pitfalls? Don’t implement ERP on its own.
3. END USER EXPERIENCE CAN BE MIXED
UX, or user experience, is where it’s at these days for anyone developing end-user systems, apps or websites. People expect to be able to log on and instantly work out how to do what they want to do. They don’t want to be faced with a 400-page user manual or a 3-day offsite training course just to be able to run a few reports.
Unfortunately, many ERP system providers only just got the memo. While things may be improving slowly in future releases, the rest of us could be left floundering on hard-to-master legacy versions for the foreseeable future.
But if you’ve already taken the plunge, all is not lost.
By offering an intuitive user experience, improved reporting and clearer presentation of data, sales-i could dramatically improve your ERP system for its users when integrated. And may even save the sanity of your staff.